Just recently, coinjournal.net published a report that shows the number of cryptocurrency exchanges that have failed during the last eight years. Interestingly, the researcher’s data shows that 42% of failed crypto asset trading platforms disappeared without a trace, giving users no explanation as to why the exchange shut down.
During the Past 8 Years, Research Shows Only 22% of Failed Crypto Exchanges Have Left Due to Actual Business-Related Reasons
A report that covers failed digital currency exchanges indicates that 42% of all the exchanges that have failed since 2014 have given no reasons as to why the business faltered and the trading platforms basically disappeared from the industry without much notice.
22% of the failed crypto exchanges during the last eight years left due to actual business-related reasons, according to coinjournal.net’s research. 9% of the trading platforms turned out to be outright scams and fraudulent businesses from the get-go.
“Following 23 exchanges going under in 2018, this number exploded upwards by 252% in 2019, before increasing a further 17% in 2020,” coinjournal.net’s report explains. “Remaining at the same level in 2021, this year there has finally been improvement, with a 55% reduction in failures if the rest of the year follows the first six months.”
In a comment sent to Bitcoin.com News, Dan Ashmore, a CFA and cryptocurrency data analyst at coinjournal.net, explained that metrics like these should be cleaned up. “If cryptocurrency is to be taken seriously and fully establish itself, it needs to continue to clean up its image and leave damning statistics like these behind,” Ashmore remarked.
Furthermore, the report notes that while 2022 has not ended, it is expected that the year will see a 55% fall in overall crypto exchange failures. “In regards to the amount simply vanishing into thin air, one could expect this to lower – regulation is still far behind, but it has at least made progress and should make it more difficult for exchanges to vanish without a trace,” the coinjournal.net report adds.
The report comes at a time when a myriad of crypto companies have been suffering financially from the crypto winter. Layoffs have been spreading across the crypto industry during the last few months as thousands of crypto employees have been let go.
Moreover, three significant insolvencies have pushed Celsius, Three Arrows Capital (3AC), and Voyager Digital to file for bankruptcy protection. At least half of a dozen digital currency platforms have frozen withdrawals.
This past Wednesday, the trading platform Zipmex paused withdrawals and said it was suffering from “financial difficulties [from] of our key business partners” caused by the crypto market downturn.
Following the pause, the Thailand Securities and Exchange Commission (SEC) has asked Zipmex why it has paused withdrawals in a letter published on Wednesday.
What do you think about the research report published by coinjournal.net? Let us know what you think about this subject in the comments section below.